Columns

Gap between rich and poor rankles the Canadian psyche

JOURNEY TO JUSTICE

JOE GUNN

April 15, 2013

Canadians are convinced that inequality matters. A poll from 2012 reported that 77 per cent of respondents believe income inequality is a "serious problem" and that the widening income gap undermines Canadian values (71 per cent).

The various "Occupy" movements may have played a role in focusing our attention on the issue, if not the solutions. But what do Church, business and government leaders propose to do about this challenge?

Last June, federal parliamentarians passed Liberal Scott Brison's motion M-315, directing the Standing Committee on Finance to study and report back on the issue. (Brison named churches as being "on the front lines.")

After much delay due to partisan bickering, the Finance Committee was prepared to devote just one single hearing to the issue. Citizens for Public Justice's chairperson, Edmonton-based Mark Huyser-Wierenga, demanded that the committee devote sufficient time and depth to the hearings on inequality to allow fulsome discussion and public participation.

He pointed to the committee's previous study of changes to the charitable tax regime, which took almost a dozen hearings and included a diverse group of presenters. Why wouldn't inequality deserve similar time and attention?

The push-back from civil society seems to have worked – the Finance Committee has just announced that three hearings will be held this month.

HOW UNEQUAL IS CANADA?

Citizens for Public Justice will enjoin the debate by releasing the second report in our Poverty Trends Scorecard series, seven two-page fact sheets on the topic of Income, Wealth and Inequality. It shows that Canada's richest 20 per cent of families now account for 47.5 per cent of the country's total market income and 40 per cent of after-tax income, an increase of 6.9 and 3.5 percentage points, respectively, from 1981 to 2010 – all at the expense of the bottom four income groups.

While poor and middle income families are minimally better off in an absolute sense, they are worse off in a relative sense.

The forces driving inequality are varied, ranging from technological change to the decline in the rate of unionization and loss of well-paid manufacturing jobs. CEOs are now paid exorbitant salaries, hundreds of times the salaries of average workers. At the same time, low-wage sectors of the economy such as personal services and retail have expanded, pushing wages lower.

One in four workers is now employed in a low-paid job, defined by the OECD as paying less than two-thirds of the median wage – about $13.33 per hour in 2012. For those on social assistance, the income security program of last resort, benefit levels have steadily deteriorated.

WHAT CAN BE DONE?

More than describing the growing gap in Canada, however, we must also engage Canadians in a serious discussion about how to address inequality. Too often, discussions about inequality take on an unproductive, divisive tone. They devolve into a finger-pointing blame game of "us" versus "them," the super-rich vs. the so-called 99 per cent. Surely, we need "all hands on deck" to confront inequality.

While relative measures of income inequality deserve attention, our first step must be to raise the incomes of the poorest households to a more humane and acceptable level. Canada's poor are very poor; on average, low-income individuals and families live on incomes that are only two-thirds of Statistics Canada's Low Income Cut-Off.

GOVERNMENT ACTION

The good news is that there are already government programs in place to address the needs of these populations: increases to the Child Tax Benefit, and the Working Income Tax Benefit are easy to administer and yield immediate results.

However, for the approximately half a million Canadians with disabilities who are on welfare or welfare-like programs, Canada could be much more visionary. Why not consider a guaranteed living income above the poverty line for people who cannot work?

More equal societies do better on a range of social indicators, ranging from health outcomes, drug abuse, imprisonment, to teen pregnancies. Discussions about inequality demonstrate another key point: government also matters.

Tax breaks for the wealthy and corporations in recent years have led to greater inequalities in market incomes of Canadians. We know the problem, we know the solutions - let's show parliamentarians that inequality matters.

(Joe Gunn is the Ottawa-based executive director of Citizens for Public Justice, www.cpj.ca, an ecumenical social advocacy organization.)